Securities Code: 7988
8th June, 2021

To our shareholders

5-3 Hikarinooka, Yokosuka-shi, Kanagawa

Nifco Inc.

Masaharu Shibao, President & Representative Director

NOTICE OF THE 69th ANNUAL GENERAL MEETING OF SHAREHOLDERS

We would like to announce that the 69th Annual General Meeting of Shareholders will be held as statedbelow.
Due to the recent novel coronavirus outbreak, the national government and prefectural governors have urged
people to stay home in order to prevent the spread of the virus. In light of these circumstances and after carefulconsideration, we have decided to implement thorough infection-control measures at the upcoming General
Meeting of Shareholders.
Since people are strongly encouraged not to go outside and in order to prevent the spread of infection, we
strongly urge you to, if possible, exercise your voting rights either by mail or online prior to the General
Meeting of Shareholders and refrain from attending the meeting in person regardless of your health condition.
Anyone who is not well (has flu-like symptoms, fatigue, shortness of breath or difficulty breathing, and/or afever) on the day of the meeting will be refused entry into the venue.
Please exercise your voting rights using either of the following methods after reviewing the attached
Reference Documents.
[Exercising Voting Rights by Mail]
Please indicate your vote for or against the resolutions on the enclosed proxy form which should be returned tothe company to reach us no later than 5:30 p.m. on June 23, 2021.
[Exercising Voting Rights Online]
To exercise your voting rights online, please either scan the login QR code or access the Company’s
designated voting website (https://soukai.mizuho-tb.co.jp/). You can input your vote for or against theresolutions by following the on-screen guidance. Please be sure to vote by no later than 5:30 p.m. on June23, 2021.

-1-

If you exercise your voting rights online, please confirm “Instructions for voting online” on page 5.
If there is no indication of approval or disapproval for particular resolutions, the shareholder will be
construed as having approved the resolution in question.
--------------------------------------------------Details of the Meeting -----------------------------------------------1

Date and Time:

10 a.m. on Thursday, June 24, 2021 (doors open at 9:30 a.m.)2

Location:

Mita NN Hall, B1 floor (1st basement), Mita NN Building, 4-1-23 Sh iba,
Minato-ku, Tokyo

This year there will be a lot fewer seats as in the last year and greater space between seats in order toprevent the spread of infections. Please note that you may be refused admission to the venue upon arrival
due to limited seat availability.
3

Agenda:Reports:

1. The business report (1st April, 2020 – 31st March, 2021),
and the consolidated accounts together with the report of the
Statutory Auditors and the Public Accountants thereon.
2. The accounts (1st April, 2020 – 31st March, 2021)

Resolutions:4

How to exercise
yourvotingrightsResolution 1

Appropriation of retained earnings

Resolution 2

Partial changes of the Articles of Incorporation

Resolution 3

Election of six candidates for Director who are
not Audit & Supervisory Committee Members

Resolution 4

Election of three candidates for Director who
are Audit & Supervisory Committee Members

Resolution 5

Election of one candidate for Director who is
an Audit & Supervisory Committee Member
to fill a vacancy

Resolution 6

Determining A mount of Remuneration for
Directors who are not Audit & Supervisory
Committee Members

Resolution 7

Determining A mount of Remuneration for
Directors who are Audit & Supervisory
Committee Members

Resolution 8

Determining A mount and Details of
Performance-Lin ked
Share-Based
Co mpensation, etc., to Directors who are not
Audit & Supervisory Co mmittee Members,etc.

Please see “How to Exercise Your Voting Rights” on page 4.

-2-

○
○

If you attend the Annual General Meet ing of Shareholders, please present the enclosed voting form to
the receptionist at the meeting.
Also, should there be any amendments to the Reference Docu ments, the business report, the accounts,or the consolidated accounts, they will be published on the Company’s website.
Company’s website (https://www.nifco.com/)

We will no longer offer gifts to or hold a social gathering for shareholders at the Annual General
Meeting of Shareholders. We appreciate your understanding.
(Request for shareholders)• If you exercise your voting rights using the proxy form, there will be a risk of infection from the process of
returning the form and counting of votes. Accordingly, if you exercise your voting rights prior to theGeneral Meeting of Shareholders, we would appreciate you voting online if at all possible.
• This year there will be a lot fewer seats as in the last year and greater space between seats in order toprevent the spread of infections. Please note that you may be refused admission to the venue upon arrival
due to limited seat availability. Operations staff of the General Meeting of Shareholders will wear masks
when receiving you after having their physical conditions checked, including measurement of bodytemperature.
• Operations staff of the General Meeting of Shareholders will wear masks when receiving you after having
their physical conditions checked, including measurement of body temperature.
• We will install alcohol-based (hand) sanitizers for shareholders near the reception desk of the venue.
• When attending the meeting, please make sure to bring a mask and wear it. Shareholders who are notwearing a mask will be refused admission to the venue.
• After measurement of body temperature at the reception desk, anyone who has a fever or appears unwellmay be refused entry into the venue and requested to go home.
• Doors at the venue may be opened for air ventilation.
• For this General Meeting of Shareholders, detailed explanations for the reports (including the audit report)
and resolutions at the venue will be omitted from the viewpoint of reducing the meeting time to prevent the
spread of COVID-19 infections. We would appreciate it if shareholders would read the notice ofconvocation prior to the General Meeting of Shareholders. Moreover, we would request that questions will
be limited to one for each shareholder, and kept brief. Please note that when you ask a question, kindly
move to the stand microphone in the venue before asking the question.
We may update the above measures in accordance with the spread of infections and announcements by thegovernment, etc., before the General Meeting of Shareholders. You are also kindly requested to check theinformation we post on the Company’s website (https://www.nifco.com/)-3-

How to exercise your voting rights
Your ability to vote at the Annual General Meeting of Shareholders is an important right.
Please read the attached Reference Documents before exercising your voting rights.
You can use one of the following three methods to exercise your voting rights.

OnlineBy mail

In person

Follow the instructions on the next
page to vote on each resolution.

Fill out the enclosed proxy form tovote on each resolution and return it
by mail.

Present the enclosed proxy form at
the reception desk when attending themeeting.

Exercise your voting rights by

Exercise your voting rights by

Date and Time:

Wednesday, 23rd June, 2021

Wednesday, 23rd June, 2021
5:30 p.m. (The form must be
returned by this time.)

Thursday, 24th June, 2021
10:00 a.m.
(Doors open at 9:30 a.m.)

5:30 p.m. (Online voting
must be completed by thistime.)How to fill out the proxy form
Indicate your votes here.
Resolutions 3 and 4* The above image is for illustration purposes only. The actual form may vary.

 If you are voting fortheappointment/reappoi
ntment of all
candidates>>

 If you are voting
against theappointment/reappoi
ntment of all
candidates>>

 If you are voting
against theappointment/reappoi
ntment of some of
the candidates

Enter a circle in the box
for “ For” and write the>> number(s) associated withthe candidate(s) you arevoting against.

Enter

a

circleintheEnter a circle in“ Against” boxthe“ For” box

Resolutions 1, 2, 5, 6, 7 and 8
intheEnter a circle in If you are voting>>
against the resolution“ Against” boxthe If you are voting forthe resolution>>

Enter a circle“ For” box

If you exercise your voting rights both by mail and online, only the votes cast online will be considered valid. If you exercise your voting rights online more than once,
only your last vote will be counted.

-4-

Instructions for voting online
Scanning your login QR code
(Smart Vote)

Entering your voting rights exercise codeand password

You can log in to the Voting Website without entering your voting
rights exercise code and password.

1

Voting Website

Scan the QR code shown at the right bottom corner of the proxy form.

1

https://soukai.mizuho-tb.co.jp/

Access the Voting Website.

Click “ P roceed”

2Enter the voting rights exercise code shown on the proxy form.

* QR code is a registered trademark of Denso Wave Incorporated.

2

Follow the on-screen instructions to cast your votes.
Enter the voting
rights exercise code

Click “ Next”

3

Enter the password shown on the proxy form.
Enter the initial
password

When using Smart Vote, you can exer cise your voting rights only

once .

Set a new password
for yourself.

If you wish to change your vote after e xcising your voting rights,
access the P C site, log in using the voting rights exercise code andpassword shown on the proxy form, and vote again.
* You can access the P C site by scanning the QR code again.

Click “ Register”

4

If you have any questions about how to operate aPC, smartphone, or cell phone when voting
online, please contact:

Follow the on-screen instructions to cast your votes.
* The above images are for illustration purposes only. Actual
screens may vary.

Internet Help Dial, Stock Transfer Agency Department, Mizuho
Trust & Banking Co., Ltd.

0120-768-524(Hours: 9:00 a.m. – 9:00 p.m. on weekdays)

Institutional investors may use the Electronic Voting Platform for institutional investors operated by ICJ, Inc.

-5-

Reference Documents for the General Meeting of Shareholders
Resolution 1

Appropriation of retained earnings

Retained earnings will be appropriated as described below.
Matters concerning year-end dividendWith respect to the year-end dividend for the 69th fiscal year, the Company hereby proposes the following
in consideration of the operating results for the year under review and future business development.
Form of dividendMatters concerning allocation ofdividend and total amount thereof

Effective date of dividends

Cash
We propose to pay 28 yen per share as the year-end
ordinary dividend (an ordinary dividend of 28 yen).
Total dividend will be 2,852,749,312 yen.

This will bring the annual dividend to 53 yen per share,including the interim dividend.

25th June, 2021

-6-

Resolution 2

Partial changes of the Articles of Incorporation(1) Reasons for this Resolution
1)

The Company will transition to a company with an audit and supervisory committee from theperspective of making Audit & Supervisory Committee Members--who are in charge of auditing theexecution of duties by Directors--members of the Board of Directors and giving them voting rights at
the meetings of the Board of Directors, thereby enhancing the auditing and supervising functions of theBoard of Directors and further strengthening corporate governance.
In accordance with this, the Company will establish new provisions for Audit & Supervisory Committee
Members and the Audit & Supervisory Committee that are necessary for the transition to a company
with an audit and supervisory committee, as well as delete provisions for Statutory Auditors and theBoard of Statutory Auditors.
In addition, the Company will revise Article 23 (Limited liability agreement for External Directors) of
the Articles of Incorporation, as provisions to enable the Board of Directors to exempt Directors fromliability by its resolution within the scope stipulated by laws and regulations so that they can fully
perform in their expected roles, as well as to enable the Company to conclude limited liability
agreements with Directors who are not Executive Directors. Each Statutory Auditor’s consent has beenobtained for the revision of Article 23 (Limited liability agreement for External Directors) of the
Articles of Incorporation. In addition, due to the transition to a company with an audit and supervisorycommittee, supplementary provisions will be established as a transitional measure for the deletion ofprovisions for exemption of Statutory Auditors from liability.
Moreover, a new provision will be established to enable the delegation of decis ion on importantbusiness executions to Directors for the purpose of realizing expeditious decision-making and flexible
business execution.
Furthermore, for flexible capital and dividend policies, in order to enable the dividend of surplus, etc.,by resolution of the Board of Directors in accordance with provision of Article 459, paragraph (1) of theCompanies Act, Article 40 (Dividend of surplus) and Article 41 (Interim dividend) of the Articles ofIncorporation will be revised as proposed.

2)

The changes of the Articles of Incorporation by this resolution will take effect at the conclusion of this
General Meeting of Shareholders.

-7-(2) The content of changes
The content of changes are as follows.
(The underlined parts indicate changes.)
Current Articles of Incorporation
Articles 1 - 4
Article 5

Chapter 1 General provisions(Provisions omitted)
Chapter 2 Stock(Provisions omitted)

Proposed changes
Chapter 1
Articles 1 - 4
Article 5

General provisions(No change)
Chapter 2 Stock(No change)(Acquisition of own stock)
Article 6
The Company may acquire its own stock throughmarket transactions, among others, by resolutionof the Board of Directors.
Articles 7 - 11
(Provisions omitted)

Articles 6 - 10

Chapter 3
Articles 12 - 17

General M eeting of Shareholders(Provisions omitted)

Chapter 3
Articles 11 - 16

General M eeting of Shareholders(No change)

Chapter 4
Article 18

Directors and the Board of Directors(Provisions omitted)

Chapter 4
Article 17

Directors and the Board of Directors(No change)(Number of Directors and their election)
Article 19 The number of Directors of the Company shallbe no more than twelve (12), and shall be electedby resolution of the General M eeting of
Shareholders.

(Deleted)(No change)

2. The resolution for election in the preceding
paragraph shall be approved by a majority of thevoting rights, with the attendance of shareholders
who have no less than one-third (1/3) of thevoting rights of shareholders who may exercise
their voting rights.
3. The resolution for the election of Directors shallnot be approved by cumulative voting.

(Number of Directors and their election)
Article 18 The number of Directors of the Company(excluding those who are Audit & Supervisory
Committee M embers) shall be no more thaneight (8); Directors who are Audit & Supervisory
Committee M embers shall be no more than three(3); and they shall be elected by resolution of theGeneral M eeting of Shareholders, while
distinguishing between Directors who are Audit& Supervisory Committee M embers and other
Directors.
2. The resolution for election in the preceding
paragraph shall be approved by a majority of thevoting rights, with the attendance of shareholders
who have no less than one-third (1/3) of thevoting rights of shareholders who may exercise
their voting rights.
3. The resolution for the election of Directors shallnot be approved by cumulative voting.

(Term of office of Directors)
Article 20 The term of office of Directors shall be until theconclusion of the Annual General M eeting of
Shareholders for the final fiscal year ending
within one (1) year of their election.

(Term of office of Directors)
Article 19 The term of office of Directors (excluding those
who are Audit & Supervisory Committee
M embers) shall be until the conclusion of theAnnual General M eeting of Shareholders for the-8-Current Articles of Incorporation

Proposed changes
final fiscal year ending within one (1) year of
their election.
2. The term of office of Directors who are Audit &Supervisory Committee M embers shall be until
the conclusion of the Annual General M eeting of
Shareholders for the final fiscal year ending
within two (2) years of their election.
3. The term of office of a Director who is an Audit& Supervisory Committee M ember assumed by
Director who is an Audit & Supervisory
Committee M ember to fill the vacancy of a
Director who is an Audit & Supervisory
Committee M ember retiring before theexpiration of the term of office shall be theremaining term of office of the retiring Director
who is an Audit & Supervisory Committee
M ember.
4. The effect of preliminary election of a Director
who is an Audit & Supervisory Committee
M ember to fill a vacancy shall be until the startof the Annual General M eeting of Shareholders
for the final fiscal year ending within two (2)years of their election at the General M eeting of
Shareholders.

(Election of Representative Directors and Executive
Directors)
Article 21 The Board of Directors shall elect Representative
Directors by its resolution. Representative
Directors shall supervise and execute thebusiness of the Company.
2. The Board of Directors may elect, by its
resolution, one (1) Honorary Chairman,
Chairman, and President, respectively, as well as
Supreme Advisors, Counsellors, Vice Chairmen,
Vice Presidents, Senior Executive M anaging
Directors, and Executive M anaging Directors.

(Remuneration for Directors)
Article 22 Directors’ remuneration, bonus, and othereconomic benefits received from the Company
as consideration for the execution of duties(hereinafter, referred to as the “Remuneration”)
shall be determined by the resolution of theGeneral M eeting of Shareholders.

(Election of Representative Directors and Executive
Directors)
Article 20 The Board of Directors shall elect Representative
Directors from Directors (excluding those who
are Audit & Supervisory Committee M embers)by its resolution. Representative Directors shallsupervise and execute the business of theCompany.
2. The Board of Directors may elect, by its
resolution, one (1) Honorary Chairman,
Chairman, and President, respectively, as well as
Supreme Advisors, Counsellors, Vice Chairmen,
Vice Presidents, Senior Executive M anaging
Directors, and Executive M anaging Directors
from Directors (excluding those who are Audit& Supervisory Committee M embers).
(Remuneration for Directors)
Article 21 Directors’ remuneration, bonus, and othereconomic benefits received from the Company
as consideration for the execution of duties(hereinafter, referred to as the “Remuneration”)
shall be determined by the resolution of theGeneral M eeting of Shareholders, while
distinguishing between Directors who are Audit& Supervisory Committee M embers and other-9-Current Articles of Incorporation

Proposed changes(Limited liability agreement for External Directors)
Article 23(New)

The Company may conclude an agreement with External
Directors to limit their respective liability for damages
referred to in Article 423, paragraph (1) of the Companies
Act if they fall under the requirements stipulated by laws andregulation. Provided, however, that the limit of liability fordamages under this agreement shall be the greater of either
the amount determined in advance of no less than 20 million
yen or the minimum total liability stipulated by laws andregulations.

Directors.
(Exemption of Directors from liability)
Article 22 In accordance with provisions of Article 426,
paragraph (1) of the Companies Act, theCompany may exempt, by the resolution of theBoard of Directors, Directors (including those
who used to be a Director) from liability fordamages referred to in Article 423, paragraph (1)of the Act, subject to the limit of laws andregulations.
2. The Company may conclude an agreement with
Directors (excluding those who are Executive
Directors) to limit their respective liability fordamages referred to in Article 423, paragraph (1)of the Companies Act if they fall under therequirements stipulated by laws and regulations.
Provided, however, that the limit of liability fordamages under this agreement shall be thegreater of either the amount determined inadvance of no less than 20 million yen or theminimum total liability stipulated by laws andregulations.

(M ethod of resolution by the Board of Directors)
Article 24 The resolution by the Board of Directors shall bemade by a majority vote with the attendance of amajority of Directors who may vote.
2. Regarding resolutions at the meeting of theBoard of Directors, the Company shall deem that
there is the resolution by the Board of Directors
to approve the resolutions if all Directors (onlythose who may participate in voting for the
resolutions) indicate their consent either inwriting or electromagnetic record. Provided,
however, this shall not apply if a Statutory
Auditor expresses an objection to the resolutions.

(M ethod of resolution by the Board of Directors)
Article 23 The resolution by the Board of Directors shall bemade by a majority vote with the attendance of amajority of Directors who may vote.
2. In the case of a proposal by a Director regarding
a matter for resolution at the meeting of theBoard of Directors, the Company shall deem that
there is the resolution by the Board of Directors
to approve the proposal if all Directors (onlythose who may participate in voting for thematter) indicate their consent for the proposal
either in writing or electromagnetic record.

(Convocation of the meeting of the Board of Directors)
Article 25 The convocation notice for the meeting of theBoard of Directors shall be sent to each Director
and Statutory Auditor by five (5) days prior to
the date of the meeting. Provided, however, that
this period may be shortened in the case of
emergency.
(New)(Convocation of the meeting of the Board of Directors)
Article 24 The convocation notice for the meeting of theBoard of Directors shall be sent to each Director
by five (5) days prior to the date of the meeting.
Provided, however, that this period may be
shortened in the case of emergency.
(Delegation of the decision on important business executions)
Article 25 Pursuant to provisions of Article 399-13,
paragraph (6) of the Companies Act, theCompany may delegate all or part of decisions
on important business executions (excluding thematters listed in each item of the Article,- 10 -

Article 26

Current Articles of Incorporation

Proposed changes(Provisions omitted)

paragraph (5)) to Directors by the resolution of
the Board of Directors.
Article 26(No change)

Chapter 5

Statutory Auditors and the Board of Statutory
Auditors(Statutory Auditors and the Board of Statutory Auditors)
Article 27 The Company shall have Statutory Auditors andthe Board of Statutory Auditors.
(Number of Statutory Auditors and their election)
Article 28 The number of Statutory Auditors of theCompany shall be no more than five (5), andshall be elected at the General M eeting of
Shareholders.
2. The resolution for election in the preceding
paragraph shall be approved by a majority of thevoting rights, with the attendance of shareholders
who have no less than one-third (1/3) of thevoting rights of shareholders who may exercise
their voting rights.

Chapter 5

Audit & Supervisory Committee(Establishment of the Audit & Supervisory Committee)
Article 27 The Company shall have an Audit
Supervisory Committee.
(Deleted)(Term of office of Statutory Auditors)
Article 29 The term of office of Statutory Auditors shall be
until the conclusion of the Annual General
M eeting of Shareholders for the final fiscal year
ending within four (4) years of their election,
while the term of office of a Statutory Auditor
assumed by a Statutory Auditor to fill a vacancy
shall be the remaining term of office of theretiring Statutory Auditor.

(Deleted)(Remuneration for Statutory Auditors)
Article 30 Remuneration for Statutory Auditors shall be
determined by resolution of the General M eetingof Shareholders.
(Limited liability agreement for External Statutory Auditors)
Article 31 The Company may conclude an agreement with
External Statutory Auditors to limit theirrespective liability for damages referred to in
Article 423, paragraph (1) of the Companies Act
if they fall under the requirements stipulated bylaws and regulation. Provided, however, that thelimit of liability for damages under thisagreement is the greater of either the amountdetermined in advance of no less than 10 million
yen or the minimum total liability stipulated bylaws and regulations.

(Deleted)- 11 -(Deleted)&

Current Articles of Incorporation

Proposed changes(Full-time Statutory Auditors)
Article 32 The Board of Statutory Auditors shall electFull-time Statutory Auditors by its resolution.

(Full-time Audit & Supervisory Committee M embers)
Article 28 The Audit & Supervisory Committee may electFull-time Audit & Supervisory Committee
M embers by its resolution.

(Convocation of the meeting of the Board of Statutory
Auditors)
Article 33 The convocation notice for the meeting of theBoard of Statutory Auditors shall be sent to each
Statutory Auditor by five (5) days prior to thedate of the meeting. Provided, however, that thisperiod may be shortened in the case of
emergency.

(Convocation of the meeting of the Audit & Supervisory
Committee)
Article 29 The convocation notice for the meeting of the
Audit & Supervisory Committee shall be sent toeach Audit & Supervisory Committee M ember
by five (5) days prior to the date of the meeting.
Provided, however, that this period may be
shortened in the case of emergency.

(Board of Statutory Auditors Regulations)
Article 34 M atters concerning the Board of Statutory
Auditors shall be subject not only to laws andregulations or provisions of this Articles ofIncorporation, but also to the Board of Statutory
Auditors Regulations decided by the Board of
Statutory Auditors.

(Audit & Supervisory Committee Regulations)
Article 30 M atters concerning the Audit & Supervisory
Committee shall be subject not only to laws andregulations or provisions of this Articles ofIncorporation but also to the Audit &Supervisory Committee Regulations decided by
the Audit & Supervisory Committee.

Chapter 6 Accounting Auditors
Articles 35 - 37
(Provisions omitted)

Chapter 6 Accounting Auditors
Articles 31 - 33
(No change)(Remuneration for Accounting Auditors)
Article 38 Remuneration for Public Accountants shall be
determined by the Representative Director withthe consent of the Board of Statutory Auditors.

(Remuneration for Accounting Auditors)
Article 34 Remuneration for Public Accountants shall be
determined by the Representative Director withthe consent of the Audit & Supervisory
Committee.

Chapter 7 Accounting(Provisions omitted)

Chapter 7 Accounting(No change)

Article 39

Article 35(Dividend of surplus)
Article 40 The Company shall pay the dividend of surplus
to shareholders or registered pledgees of shares
listed or recorded in the final register ofshareholders as of M arch 31 each year, pursuant
to the resolution of the General M eeting of
Shareholders.

(Dividend of surplus, etc.)
Article 36 The Company may determine, by resolution of
the Board of Directors, matters stipulated in each
item of Article 459, paragraph (1) of theCompanies Act, including the dividend of
surplus, unless otherwise specified by laws andregulations.

(Interim dividend)
Article 41 The Company may pay an interim dividend as
stipulated in Article 454, paragraph (5) of the(Record date for the dividend)
Article 37 The record date for the year-end dividend of theCompany shall be M arch 31 each year.

- 12 -

Current Articles of Incorporation

Proposed changes

Companies Act to shareholders or registeredpledgees of shares listed or recorded in the final
register of shareholders as of September 30 eachyear, pursuant to the resolution of the Board of
Directors.

Article 42(New)(Provisions omitted)

2. The record date for the interim dividend of theCompany shall be September 30 each year.
3. In addition to the preceding two paragraphs, theCompany may pay the dividend of surplus bydetermining the record date.
Article 38(No change)

Supplementary provisions(Transitional measures for exemption of Statutory Auditorsfrom liability)
In accordance with provisions of Article 426, paragraph (1)of the Companies Act, the Company may exempt, byresolution of the Board of Directors, those who used to be
Statutory Auditors from liability for damages referred to in
Article 423, paragraph (1) of the Act, subject to the limit oflaws and regulations.
This supplementary provision shall be deleted after a lapse often (10) years from June 24, 2021.

- 13 -

Resolution 3

Election of six candidates for Director who are not Audit &Supervisory Committee Members

If Resolution 2 “Partial changes of the Articles of Incorporation” is approved in its original form, the Company
will transition to a company with an audit and supervisory committee, and the terms of office of all (seven)
Directors will expire when the changes of the Articles of Incorporation take effect.
Accordingly, we propose the election of six candidates as Director (excluding Directors who are Audit &Supervisory Committee Members; hereinafter, the same shall apply under this Resolution). This Resolution
shall take effect on condition that changes of the Articles of Incorporation in Resolution 2 “Partial changes of
the Articles of Incorporation” become effective.
The candidates for Director are as follows.
Fields expected of Directors by the Company

No.

*

Position at theCompanyName

1Toshiyuki
Yamamoto

Reappointm
ent2

Masaharu
ShibaoReappointm
ent

Chairman &Representative
Director
CEO
President &Representative
Director
COO

Management
strategy

Legal
FinancialandOverseas affairs,
riskcapital business
managepolicy
ment

IT DX

ESG,
sustainab
ility













Director, Senior
Executive
Managing Officer
CSO & CIO

3Toshiki Yauchi

Reappointm
ent

4

Yoshiko
Nonogaki

Reappointm
ent

External

Independent

External Directors

5Brian K.
Heywood

Reappointm
ent

External

Independent

External Directors

6

Masayuki Abe

New
appointment

External

Independent

-



















CEO stands for Chief Executive Officer, COO for Chief Operating Officer, CSO for Chief Strategy Officer, and CIO for
Chief Information Officer.

New
New Director
appointm
candidateent

Reappoint Reappointed Director
External Director
External
mentcandidatecandidate- 14 -

Independent Director
Independ pursuant to theentregulations of thestock exchange

No.

1

Toshiyuki
Yamamoto(11th October,
1949)

Number of shares of the Co mpany
held

51,996(Number o f the Co mpany’ s shares
to be granted based on theshare-based compensation plan)(39,896)

Number of years of service
Number o f Board o f Directors
meetings attended

9
13 out of 13[Career summary, position and assignment at the Company]
Reappointment

April 1973

Joined the Company

January 1995

Head of Saga mihara P lant of theCompany

June 2016

Chairman,
P resident&
Representative Director, CEO &COO of the Company

June 2002

Executive Officer of the Company

June 2017

April 2008

Executive Officer of the Co mpany,
P resident of Nifco America Corp.

P resident & Representative Director,
CEO & COO of the Company

June 2020

June 2012

P resident & Representative Director,
COO of the Company

P resident & Representative Director,
Chief E xecutive Officer ( CEO) of theCompany

April 2021

Chairman & Representative Director,
Chief E xecutive Officer ( CEO) of theCompany (to present)[Significant concurrent positions]
None

Reasons for proposing the candidate for Director
Mr. Ya ma moto is once again proposed as a candidate for Director due to his ability to execute business strategies with strong leadershipin a timely and appropriate manner, as well as his broad experience of global management gained as the P resident & Representative
Director of the Co mpany fro m 2012, a fter obtaining experience as the Head of major do mestic plants and the P resident of theCompany’ s overseas subsidiary.

No.

2

Number of shares of the Co mpany
held

Masaharu Shibao(14th December,
1961)(Number o f the Co mpany’ s shares
to be granted based on theshare-based compensation plan)
Number of years of service
Number o f Board o f Directors
meetings attended

27,906(23,006)
5
13 out of 13[Career summary, position and assignment at the Company]
Reappointment

April 1985

Joined the Company

April 2010

P resident
GMBH

June 2015

Executive Officer of the Co mpany,
P resident of Nifco America Corp.

June 2016

Director and Executive Managing
Officer, CMO, Head o f Sales o f theCompanyof

Nifco

June 2019

Director and Senior Executive
Managing Officer, CMO, Head o f
Sales, In charge o f Technology &P latform Business Division of theCompany

June 2020

Vice P resident & Representative
Director, Head of Sales, Chief
Operating Officer ( COO) of theCompany

April 2021

P resident & Representative Director,
Chief Operating Officer (COO) o f
the Company (to present)

Deutschland[Significant concurrent positions]
None

Reasons for proposing the candidate for Director
Mr. Shibao is once again proposed as a candidate for Director due to his global and diverse experience, insights and expertise cultivatedthrough his long career in sales and as the P resident of the Company’ s subsidiaries in Europe and the U.S.

- 15 -

No.

3

Toshiki Yauchi(16th July 1961)

Number of shares of the Co mpany
held

18,156(Number o f the Co mpany’ s shares
to be granted based on theshare-based compensation plan)(16,256)

Number of years of service
Number o f Board o f Directors
meetings attended

3
13 out of 13[Career summary, position and assignment at the Company]
Reappointment

April 1985

Joined the Company

July 2007

Divisional General Manager ofCorporate Strategy Division of theCompany

June 2015

Executive
Officer,
Divisional
General Manager of Corporate
Strategy Division of the Company

June 2018

Director and Executive Managing
Officer, Divisional General Manager
of Corporate Strategy Division, In
charge of Ad ministration & Financeof the Company

June 2019

Director and Senior Executive
Managing
Officer ,Divisional
General Manager of Corporate
Strategy Division, In charge o fAdministration & Finance of theCompany

April 2021

Director and Senior Executive
Managing
Officer ,HeadofAdministration,
Chief
Strategy
Officer ( CSO), Chief In for mation
Officer (CIO) , In charge of Financeof the Company (to present)[Significant concurrent positions]
None

Reasons for proposing the candidate for Director
Mr. Yauchi is once again proposed as a candidate for Director due to his diverse experience, insights and expertise cultivated through hislong career mainly in corporate strategy, and developing manage ment strategies as the Divisional General Manager of the Corporate
Strategy Division and being in charge of overall IR activities of the Company.

No.

4

Number of shares of the Co mpany
held

Yoshiko
Nonogaki(31st July 1957)(Number o f the Co mpany’ s shares
to be granted based on theshare-based compensation plan)
Number of years of service
Number o f Board o f Directors
meetings attended(- shares)
2
13 out of 13[Career summary, position and assignment at the Company]
Reappointment
External
Independent

April 1980

Joined Sony Corporation (current
Sony Group Corporation)

April 2013

Director of Global Diversity,
P ersonnel HQ of the company

September 1992

P resident & Representative Directorof Sony P oland

June 2015

External Director of Jolly-P asta Co.,Ltd.

April 2009Manager of P lanning & Marketing
Department, Business & P rofessional
Enterprise HQ of Sony Corporation(current Sony Group Corporation)

June 2019

External Director of the Co mpany (topresent)

June 2020

Outside Director of GS Yuasa
Corporation (to present)[Significant concurrent positions]
Outside Director of GS Yuasa Corporation

Reasons for proposing the candidate for External Director and overview of expected roles
Ms. Nonogaki is proposed as a c andidate for External Director because the Co mpany expects her to re flect her broad experience in themarketing field cultivated through her career in a large corporation in the Company’ s management as External Director.
Moreover, her expected role will be to i mprove the quality of the Co mpany’s corporate governance, by re flecting her broad e xperienceand insight in the marketing field cultivated through her career in a large corporation.

- 16 -

No.

5

Brian
HeywoodK.

(9th January 1967)

Number of shares of the Co mpany
held- shares(Number o f the Co mpany’ s shares
to be granted based on theshare-based compensation plan)(- shares)

Number of years of service
Number o f Board o f Directors
meetings attended

1
10 out of 10[Career summary, position and assignment at the Company]
Reappointm
ent
External
Independent

August 1999
January 2001

November 2014

Vice President, Citibank, N.A.
T aiyo Pacific Partners, L.P.
Managing Partner and CEO (topresent)
External Director of Roland
Corporation

March 2020
June 2020

Outside Director of Roland DG
Corporation (to present)
External Director of theCompany (to present)
OutsideDirector,MaxellHoldings, Ltd. (to present)[Significant concurrent positions]Managing Partner and CEO of T aiyo Pacific Partners, L.P.
Outside Director of Roland DG Corporation, Outside Director of Maxell Holdings, Ltd.
Reasons for proposing the candidate for External Director and overview of expected roles
Mr. Heywood is proposed as a candidate for External Director because he has extensive experience and knowledge as acorporate management and investment expert, and the Company expects him to leverage his expertise in corporate
management and perspective as a shareholder/investor in the Company’s management.
Moreover, his expected role will be to contribute to improving corporate value, by incorporating his perspective as ashareholder/investor.
No.

6

Number of shares of the Co mpany
held

Masayuki Abe(Number o f the Co mpany’ s shares
to be granted based on theshare-based compensation plan)
Number of years of service(5th October 1956)- shares(- shares)

Number o f Board o f Directors
meetings attended-[Career summary, position and assignment at the Company]
New
appointment

April 1980

External

March 2003

Independent

May 2010
December 2013

Joined Kao Soap Co., Ltd.
(current Kao Corporation)
General Manager of Information
Technology Group of thecompany
General Manager of Strategic
Planning Division of thecompany
Head-Information Systems ofthe company

March 2015
April 2018

Executive Officer of thecompany
Senior Advisor of General
DigitalBusiness
Division(current General IT Division) of
Toppan Forms Co., Ltd. (topresent)[Significant concurrent positions]
Senior Advisor of General IT Division of Toppan Forms Co., Ltd.
Reasons for proposing the candidate for External Director and overview of expected roles
Mr. Abe is proposed as a candidate for External Director because he has extensive experience and insight in the IT field
cultivated through his career in a large corporation, and the Company expects him to leverage his expertise in the
Company’s management, even though he has never been directly involved in corporate management.
Moreover, his expected role will be to promote the Company’s management in the fields related to IT and DX.

- 17 -

(Notes) 1.
2.

3.
4.

5.
6.

7.

8.

Masayuki Abe is a candidate as new Director.
The Company has no special interests with Toshiyuki Yamamoto, Masaharu Shibao, Toshiki Yauchi, Yoshiko Nonogaki, or
Masayuki Abe. Taiyo Pacific Partners, L.P., for which Brian K. Heywood serves as CEO, is a shareholder of the Company, andhas concluded an advisory agreement with the Company for the purpose of providing advice and proposals for management andbusiness strategies. The amount of transactions accounts for less than 1% of the consolidated sales of both the Company and the
L.P., while services for the advisory agreement are provided by other members of the L.P.
Yoshiko Nonogaki, Brian K. Heywood, and Masayuki Abe are candidates as External Directors.
The Company designated and filed Yoshiko Nonogaki and Brian K. Heywood as independent officers pursuant to the regulationsof Tokyo Stock Exchange, Inc. If this Resolution is passed and their reappointment is approved, they will continue to be
independent officers. Masayuki Abe satisfies the requirements for an independent officer pursuant to the regulations of Tokyo
Stock Exchange, Inc. The Company plans to designate and file him as an independent officer with the said Stock Exchange.
Yoshiko Nonogaki will have served as External Director for two years at the close of this General Meeting of Shareholders. BrianK. Heywood will have served as External Director for one year at the close of this General Meeting of Shareholders.
The Company has concluded an agreement with Yoshiko Nonogaki and Brian K. Heywood to limit their liability for damages
referred to in Article 423, paragraph (1) of the Companies Act pursuant to the provision of the Articles of Incorporation. The limitof liabilities for damages under this agreement is the greater of either 20 million yen or the minimum total liability stipulated bylaws and regulations. The Company plans to extend the aforementioned limited liability agreement if they are reappointed. In
addition, if Masayuki Abe is appointed, the Company plans to conclude an agreement with him to limit his liability for damages
referred to in Article 423, paragraph (1) of the Companies Act pursuant to the provision of the Articles of Incorporation. The limitof liabilities for damages under this agreement is the greater of either 20 million yen or the minimum total liability stipulated bylaws and regulations.
The Company has concluded a directors and officers liability insurance (D&O Insurance) policy covering all Directors, inaccordance with provisions of Article 430-2, paragraph (1) of the Companies Act, for the Company to indemnify the expenses
referred to in item (i) of the paragraph and the losses in item (ii) within the scope stipulated by laws and regulations (provided,
however, that it shall exclude cases of obtaining illegal profits or benefits, or criminal acts, wrongful acts, fraudulent acts, or acts
conducted while recognizing they are in violation of laws and regulations, rules or regulatory laws). If Resolution 2 for changing
the Articles of Incorporation and this Resolution for reappointment of each candidate are approved, the Company will continue
the agreement for each Director. In addition, if the election of Masayuki Abe is approved, the Company will conclude the same
agreement with him.
The number of shares of the Company held by each candidate includes the number of the Company’s shares to be granted basedon the share-based compensation plan (as of June 1, 2021).
[Particulars of the Company’s shares to be granted based on the share-based compensation plan]
The Company introduced a performance-linked share-based compensation plan (hereinafter, referred to as the “Plan”), which
grants the Company’s shares to Company Directors (excluding External Directors and those who live abroad; hereinafter, thesame shall apply) in FY2016. The Company’s shares to be granted to each candidate based on the Plan shall consist of (a) the
portion that is not linked to business performance and (b) the portion that is linked to business performance achieved over acertain time period. The number of shares to be granted to each candidate based on the Plan provided in this document only refers
to the number of points granted based on the business performance which has become finalized at the moment. Specifically, thenumber of the Company’s shares to be granted shows the total number of (a) points for the non-performance-linked compensation
granted on or before June 1, 2021 and (b) points for the performance-linked compensation granted on June 1, 2020. The voting
rights pertaining to the Company’s shares to be granted based on the Plan shall not be exercised until the granting of theCompany’s shares to each candidate in the future. The Company’s shares corresponding to 30% of the said shares to be granted
will be sold on the market and proceeds from the sale of such shares will be granted to each candidate to secure funds for tax
payment purposes.

- 18 -

Resolution 4

Election of three candidates for Director who are Audit &Supervisory Committee Members

If Resolution 2 “Partial changes of the Articles of Incorporation” is approved in its original form, the Company
will transition to a company with an audit and supervisory committee.
Accordingly, we propose the election of three candidates as Directors who are Audit & Supervisory
Committee Members.
The Board of Statutory Auditors’ consent has been obtained for this Resolution.
This Resolution shall take effect on condition that changes of the Articles of Incorporation in Resolution 2“Partial changes of the Articles of Incorporation” become effective.
The candidates for Directors who are Audit & Supervisory Committee Members are as follows.

No.

*

Position at theCompanyName

1Junji Honda

New
appointment

2

Toshiyuki
AraiNew
appointment

External

Independent3

Mitsuhiro
MatsumotoNew
appointment

External

Independent

Fields expected of Directors by theCompany
Management
strategy

Executive
M anaging
Officer
Head of Finance
CFO
External
Statutory
Auditor(Part-time)
External
Statutory
Auditor(Part-time)

Legal
FinancialandOverseas affairs,
riskcapital business
managepolicy
ment

IT DX

ESG,
sustainab
ility







CFO stands for Chief Financial Officer.

New
New Director
appointm
candidateent

Reappoint Reappointed Director
External Director
External
mentcandidatecandidate- 19 -

Independent Director
Independ pursuant to theentregulations of thestock exchange

No.

1

Number of shares of the Co mpany
held

Junji Honda(10th November
1952)(Number o f the Co mpany’ s shares
to be granted based on theshare-based compensation plan)
Number of years of service

25,289(11,289)-

Number o f Board o f Directors
meetings attended-[Career summary, position and assignment at the Company]
New
appointment

April 1988

Joined the Company

June 2002

Divisional General Manager of
Accounting Department of theCompany

June 2004

Executive
Officer,
Divisional
General Manager of Accounting
Department of the Company

April 2013

Executive Officer, Head o f Global
Management
Controlof theCompany

June 2014

Executive Managing Officer, Deputy
Head of Ad ministration, General
Manager of Accounting Departmentof the Company

June 2015

Executive Managing Officer & CFO,
Deputy Head of Administration,
General Manager of Accounting
Department of the Company

April 2017

Executive Managing Officer & CFO,
Head of Finance of the Company

April 2021

Executive Managing Officer, Headof Manage ment Control, Chief
Financial Officer (CFO) o f theCompany (to present)[Significant concurrent positions]
None

Reasons for proposing the candidate for Director

Mr. Honda is proposed as a candidate for Director because he has considerable insight in finance and accounting by serving in
Accounting and Corporate Administration Departments and supervising Finance & Accounting Department as CFO. He is proposed as a
candidate for Director who is an Audit & Supervisory Committee M e mber because the Co mpany e xpects him to r e flect such knowledge
and experience in playing an appropriate role for strengthening the Company’ s corporate governance after the transition to a company
with an audit and supervisory committee.

No.

2Toshiyuki Arai

(5th February 1970)

Number of shares of the Co mpany
held-(Number o f the Co mpany’ s shares
to be granted based on theshare-based compensation plan)(- shares)

Number of years of service
Number o f Board o f Directors
meetings attended

13 out of 13[Career summary, position and assignment at the Company]
New
appointment
External

April 1997

Registered as attorney-at-law (Tokyo
Bar Association)

June 2013

Statutory Auditor (External) of theCompany (to present)

February 2013

Established Arai Tokyo Law Office

June 2014

External Director of Spiber Inc. (topresent)

September 2019

Outside Audit & Supervisory Board
Me mber o f Moneytree KK (topresent)

Independent[Significant concurrent positions]
Attorney-at-law, Representative Lawyer of Arai Tokyo Law Office
External Director of Spiber Inc.
Outside Audit & Supervisory Board Member of Moneytree KK

Reasons for proposing the candidate for External Director and overview of expected roles

Mr. Arai is proposed as a candidate for External Director because he is well versed in laws in Japan and abroad as an attorney-at-law,
and the Company expects him to conduct audits focusing on compliance in particular.
Moreover, his expected role will be to improve the quality of the Company’ s corporate governance, by conducing audits focusing on
compliance in particular. He is proposed as a c andidate for Director who is Audit & Supervisory Committee Me mbe r bec ause theCompany expects him to reflect his expertise and experience in playing an appropriate role for strengthening the Company’ s corporate
governance after the transition to a company with an audit and supervisory committee.

- 20 -

No.

3

Mitsuhiro
MatsumotoNew
appointment
External

600(Number o f the Co mpany’ s shares
to be granted based on theshare-based compensation plan)(- shares)

Number of years of service
Number o f Board o f Directors
meetings attended

12 out of 13[Career summary, position and assignment at the Company]
October 1992
April 1996

Independent(7th M ay 1969)

Number of shares of the Co mpany
held

October 1999

JoinedAoyamaAudit
Corporation
Registered as Certified Public
Accountant
President of CPA, Matsumoto
Accounting Office(current CPA, T ax Accountant,Matsumoto Accounting Office)(to present)

September 2008

August 2014

June 2019

Externa
Statutory
Auditor(current Outside Director, Audit&
Supervisory
Committee
Member) of Suzuki Co., Ltd. (topresent)
Externa
Statutory
Auditor(current Outside Director, Audit&
Supervisory
Committee
Member) of Hoden Seimitsu
Kako Kenkyusho Co., Ltd. (topresent)
External Statutory Auditor of theCompany (to present)[Significant concurrent positions]
President of CPA, T ax Accountant, Matsumoto Accounting OfficeOutside Director, Audit & Supervisory Committee Member of Suzuki Co., Ltd.
Outside Director, Audit & Supervisory Committee Member of Hoden Seimitsu Kako Kenkyusho Co., Ltd.
Reasons for proposing the candidate for External Director and overview of expected roles
Mr. Matsumoto is proposed as candidate for External Statutory Auditor because he has broad knowledge andexperience in auditing corporate management as a Certified Public Accountant, and the Company expects him to
perform the Company’s audits properly.
Moreover, his expected role will be to improve the quality of the Company’s corporate governance, by conducing
audits focusing on accounting in particular. He is proposed as a candidate for Director who is an Audit & Supervisory
Committee Member because the Company expects him to reflect such knowledge and experience in playing anappropriate role for strengthening the Company’s corporate governance after the transition to a company with an audit
and supervisory committee.
(Notes) 1.
2.
3.

4.
5.

T here are no special interests between each candidate and the Company.
T oshiyuki Arai and Mitsuhiro Matsumoto are candidates as External Director.
If Junji Honda, Toshiyuki Arai, and Mitsuhiro Matsumoto are appointed, the Company plans to conclude an agreement with threeof them to limit their liability for damages referred to in Article 423, paragraph (1) of the Companies Act pursuant to the provisionof the Articles of Incorporation. The limit of liabilities for damages under this agreement is the greater of either 20 million yen or
the minimum total liability stipulated by laws and regulations.
Toshiyuki Arai and Mitsuhiro Matsumoto satisfy the requirements for an independent officer pursuant to the regulations of Tokyo
Stock Exchange, Inc. The Company plans to designate and file them as independent officers with the said Stock Exchange.
The Company has concluded a directors and officers liability insurance (D&O Insurance) covering all Directors, in accordancewith provisions of Article 430-2, paragraph (1) of the Companies Act, for the Company to indemnify the expenses referred to initem (i) of the paragraph and the losses in item (ii) within the scope stipulated by laws and regulations (provided, however, that itshall exclude cases of obtaining illegal profits or benefits, or criminal acts, wrongful acts, fraudulent acts, or acts conducted while
recognizing they are in violation of laws and regulations, rules or regulatory laws). If Resolution 2 for changing the Articles ofIncorporation and this Resolution for appointment of each candidate are approved, the Company will conclude the same
agreement with each Director.

- 21 -

Resolution 5

Election of one candidate for Director who is an Audit &Supervisory Committee Member to fill a vacancy

If Resolution 2 “Partial changes of the Articles of Incorporation” is approved in its original form, the Company
will transition to a company with an audit and supervisory committee.
Accordingly, to prepare for a contingency in which the Company does not have the number of Directors who
are Audit & Supervisory Committee Members required by laws and regulations, the Company proposes toelect one candidate as Director who is Audit & Supervisory Committee Member to fill a vacancy.
The Board of Statutory Auditors’ consent has been obtained for this Resolution.
This Resolution shall take effect on condition that changes of the Articles of Incorporation in Resolution 2“Partial changes of the Articles of Incorporation” become effective.
The candidate for Director who is Audit & Supervisory Committee Member to fill a vacancy is as follows.

Masakazu Wakabayashi(30th January 1963)

Number of shares of the Co mpany
held- shares[Career summary]
October 1988
December 1997
April 2007

JoinedCentury
Corporation
Partner of Century
Corporation
JoinedYasumori
Corporation

Audit
Audit

May 2008

Representative
PartnerofYasumori Audit Corporation(to present)

Audit[Significant concurrent positions]
None
Reasons for proposing the candidate for External Director to fill a vacancy and overview of reasons for expectations
Mr. Wakabayashi is proposed as a candidate for External Director because the Company judges him to have sufficientinsight to audit corporate management as a Certified Public Accountant.
Moreover, his expected role will be to leverage his knowledge and experience in the Company’s audit system. He is
proposed as a candidate for Director who is an Audit & Supervisory Committee Member to fill a vacancy because theCompany expects him to reflect his expertise and experience in playing an appropriate role for strengthening theCompany’s corporate governance after the transition to a company with an audit and supervisory committee.
(Notes) 1.
2.
3.

4.

T here are no special interests between Masakazu Wakabayashi and the Company.
Masakazu Wakabayashi is a candidate for External Director to fill a vacancy. If the candidate becomes External Director, theCompany will designate and file him as an independent officer pursuant to the regulations of Tokyo Stock Exchange, Inc.
The Company has concluded an agreement with External Directors to limit their respective liability for damages referred to in
Article 423, paragraph (1) of the Companies Act pursuant to the provision of the Articles of Incorporation. The limit of liability
for damages based on this agreement is the greater of either 20 million yen or the minimum total liability stipulated by laws andregulations.
The Company also plans to conclude a limited liability agreement with Masakazu Wakabayashi as an External Director if he iselected as an External Director.
The Company has concluded a directors and officers liability insurance (D&O Insurance) covering all Directors, in accordancewith provisions of Article 430-2, paragraph (1) of the Companies Act, for the Company to indemnify the expenses referred to initem (i) of the paragraph and the losses in item (ii) within the scope stipulated by laws and regulations (provided, however, that itshall exclude cases of obtaining illegal profits or benefits, or criminal acts, wrongful acts, fraudulent acts, or acts conducted while
recognizing they are in violation of laws and regulations, rules or regulatory laws). The Company also plans to conclude the same
agreement with Masakazu Wakabayashi if he is elected as an External Director.

- 22 -

Resolution 6

Determining Amount of Remuneration for Directors who are not
Audit & Supervisory Committee Members

The remuneration of Directors of the Company has been no more than 400 million yen per annum since it was
decided by resolution of the 55th Annual General Meeting of Shareholders held on June 27, 2007. If
Resolution 2 “Partial changes of the Articles of Incorporation” is approved, the Company will transition to acompany with an audit and supervisory committee, and therefore needs to determine the new upper limit on
the payment of remuneration for Directors who are not Audit & Supervisory Committee Members after thetransition.
Considering the existing upper limit on payment for remuneration of Directors and various factors including
economic conditions, we propose the upper limit on their remuneration to be no more than 460 million yen perannum (of which no more than 60 million yen for External Directors).
We also propose that the remuneration of Directors who are not Audit & Supervisory Committee Members
shall not include the salary as an employee for Directors concurrently serving as employees.
The current number of Directors is seven (of which three are External Directors). If Resolutions 2 and 3 areapproved in their original forms, the number of Directors who are not Audit & Supervisory Committee
Members subject to this Resolution will be six (of which three are External Directors).
Moreover, this Resolution shall take effect on condition that changes of the Articles of Incorporation under
Resolution 2 become effective.
We submitted this Resolution after the deliberation of the Nomination, Compensation and GovernanceCommittee, having judged that the amount of remuneration was appropriate, taking into account the fairness of
calculating the amount of remuneration under this Resolution and the purpose of introduction, among others.

Resolution 7

Determining Amount of Remuneration for Directors who are
Audit & Supervisory Committee Members

If Resolution 2 “Partial changes of the Articles of Incorporation” is approved, the Company will transition to acompany with an audit and supervisory committee, and therefore, Directors who are Audit & Supervisory
Committee Members will not only conduct audits previously done by Statutory Auditors, but also participate
in resolutions of the Board of Directors as Director, and supervise the execution of duties by other Directors.
Accordingly, in order to have an appropriate remuneration level for their duties, we propose to set the upper
limit on the payment no more than 90 million yen per annum for the remuneration of Directors who are Audit& Supervisory Committee Members.
If Resolutions 2 and 4 are approved in their original forms, the number of Directors who are Audit &Supervisory Committee Members subject to this Resolution will be three.
Please note that this Resolution shall take effect on condition that changes of the Articles of Incorporation
under Resolution 2 become effective.
We submitted this Resolution after the deliberation of the Nomination, Compensation and GovernanceCommittee, having judged that the amount of remuneration was appropriate, taking into account the fairness of
calculating the amount of remuneration under this Resolution and the purpose of introduction, among others.

- 23 -

Resolution 8

1.

Determining Amount and Details of Performance-Linked
Share-Based Compensation, etc., to Directors who are not Audit& Supervisory Committee Members, etc.

Reasons for this Resolution and reasons for determining this remuneration to be appropriate
The Company has maintained a share-based compensation plan covering Directors and Executive
Officers (hereinafter referred to as the “Plan”) whose introduction was approved by the 64th Annual
General Meeting of Shareholders held on June 24, 2016. If Resolution 2 “Partial changes of the Articles
of Incorporation” is approved in its original form, the Company will transition to a company with an audit
and supervisory committee. Accordingly, the Company requests approval for abolishing the current limit
on remuneration for Directors and Executive Officers under the Plan; establishing a new limit on
remuneration based on the Plan for Directors who are not Audit & Supervisory Committee Members andExecutive Officers (excluding External Directors and those living overseas; hereinafter they arecollectively referred to as “Directors who are not Audit & Supervisory Committee Members, etc.”); andcontinuing the Plan after partly revising it.
As with the current limit on remuneration under the Plan, this limit on remuneration will be establishedseparately from the limit on remuneration requested for approval under Resolution 6 “Determining
Amount of Remuneration for Directors who are not Audit & Supervisory Committee Members.”
The Plan aims at defining the relationship between the remuneration of Directors who are not Audit &Supervisory Committee Members, etc., and the Company’s share value, and providing an incentive forincreasing mid and long-term business performance and corporate value, and we believe the Plan issuitable for achieving these objectives.
If Resolution 3 “Election of six candidates as Director who are not Audit & Supervisory Committee
Members” is approved in its original form, Directors who are not Audit & Supervisory Committee
Members, etc., eligible under the Plan will be three Directors who are not Audit & Supervisory
Committee Members and nine Executive Officers.
This Resolution shall take effect on condition that changes of the Articles of Incorporation in Resolution
2 “Partial changes of the Articles of Incorporation” become effective.

2.

Amount of remuneration and details of the Plan

(1) Overview of the Plan
The Plan is a share-based compensation plan, under which a trust purchases the Company’s shares using
remuneration of Directors who are not Audit & Supervisory Committee Members, etc., to be contributedby the Company as resources so as to grant and provide (hereinafter, referred to as “Grant, etc.”) the
Company’s shares and cash corresponding to realization value of the Company’s shares (hereinafter,
referred to as “Company’s Shares, etc.”) to the Directors who are not Audit & Supervisory Committee
Members, etc.
The Company extended the Plan using a trust that was entrusted with cash contributed by the Company(hereinafter, referred to as the “Trust”) with a two-year trust period that covered two fiscal years from thefiscal year ended March 2020 to the fiscal year ended March 2021 (the period covered by the Plan shallhereinafter be referred to as the “Targeted Period”). However, the Company will change the Targeted
Period to fiscal years covered by the Medium to Long-Term Management Plan for three consecutive- 24 -

fiscal years starting with the fiscal year to which the grant date of performance base points belongs.
• Directors who are not Audit & Supervisory Committee M embers(excluding External Directors and those who live abroad)• Executive Officers (excluding those who live abroad)1)

Persons eligible for Grant, etc. ofCompany’s Shares, etc. subject to thisResolution

2)

Potential impact of the Company’s shares subject to this Resolution on the total number of outstanding shares of
the Company

Upper limit of cash to be contributed by theCompany (as stated in (2) below)• The amount obtained by multiplying 400 million yen by the number ofyears of the trust period• The upper limit for the three fiscal years that are the trust period thatstarts from the fiscal year under review shall be 1,200 million yen in
total.

Upper limit of the total number of theCompany’s S hares, etc., to be acquired by
Directors who are not Audit & S upervisory
Committee Members, etc., and method ofacquiring the Company’s shares (as stated in(3) below)• The upper limit of points to be granted to Directors who are not Audit &Supervisory Committee M embers, etc., for each fiscal year shall be
160,000 points.
• The number of shares obtained by converting at 1 point = 1 share isapproximately 0.16% of the total shares outstanding (as of 31st M arch,
2021, net of treasury shares).
• The Company’s shares will be acquired on the share market or from theCompany (sale of treasury shares).

3)

Details of criteria for achieving
performance (as stated in (3) below)

It shall be changed within 0% to 200%, according to the achievement ofM edium to-Long Term M anagement Plan targets (operating cash flow,
ROIC and TSR, etc.) in the last fiscal year of the M edium to-Long Term
M anagement Plan.

4)

The timing of Grant, etc., of theCompany’s Shares, etc., to Directors
who are not Audit & S upervisory
Committee Members, etc. (as stated in(4) below)

In principle, after retirement* If a Director who is not an Audit & Supervisory Committee M ember,etc., is deceased, cash equivalent of realization value of Company’s
shares shall be paid to their heir.

5)

Grounds of demand for repayment of
the granted amountIf a person eligible for share grant falls under the prescribed conditions,
including retirement due to illegal activities or one’s own convenience
within one year from the fixing date of beneficiary rights, the Company
may demand repayment.

(2) Upper limit of cash to be contributed by the Company
The Plan’s trust period after the extension shall be approximately three years from September 2021
(scheduled) to August 2024 (scheduled). The Company will contribute trust money with the upper limitof 1,200 million yen for the trust period (approx. three years), while Directors who are not Audit &Supervisory Committee Members, etc., meeting the requirements for beneficiaries will be beneficiaries.

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The Company will establish the Trust (including the extension of the trust period in the third paragraph ofthis (2); hereinafter, the same shall apply). The said upper limit of trust funds to be contributed to theTrust shall be the total of the funds to purchase the Company shares through the Trust, trust fee, andexpenses during the trust period. The Trust shall, according to the custodian’s instructions, purchase
Company’s shares on the share market or from the Company (sale of treasury share) using trust funds as
resources.
During the trust period, the Company shall grant points to Directors who are not Audit & Supervisory
Committee Members, etc. (as stated in (3) below), and the Trust shall provide the Grant, etc., of theCompany’s Shares, etc.
Upon the close of the trust period of the Trust, instead of setting up a new Trust, the Trust may becontinued by changing the trust agreement and implementing an additional trust (the said method will beapplied for the trust period that starts from the fiscal year under review). For each extended trust period,
the Company shall provide an additional contribution up to a total of the amount obtained by multiplying
400 million yen by the number of years of the said trust period, and during the extended trust period, it
shall continue to issue points to Directors are not Audit & Supervisory Committee Members, etc., and theTrust shall continue to provide the Grant, etc., of Company’s Shares, etc. If there are Company’s shares(excluding Company’s shares equivalent to points granted to Directors who are not Audit & Supervisory
Committee Members, etc., and for which the Grant, etc., has not been completed) and cash as of the last
day of the former trust period (hereinafter, referred to as “Remaining Shares, etc.”) in case of anadditional contribution, such Remaining Shares, etc., shall be succeeded to the Trust that is extended. The
total of Remaining Shares, etc., and trust funds to be additionally contributed to shall be up to the amountobtained by multiplying 400 million yen by the number of years of said trust period.
If there is a serving Director who is not an Audit & Supervisory Committee Member, etc., that may meetthe requirements for beneficiaries at the close of the Trust, points will not be granted after that to such
Director who is not an Audit & Supervisory Committee Member, etc. However, the trust period of theTrust may be extended up to 10 years until such Director who is not an Audit & Supervisory Committee
Member retires, and granting of the Company shares, etc., to such Director who is not an Audit &Supervisory Committee Member is completed.
(3) Method of calculating the number of Company’s shares to be acquired by Directors who are not Audit& Supervisory Committee Members, etc., and upper limit
The number of the Company’s shares subject to the Grant, etc., to Directors who are not Audit &Supervisory Committee Members, etc., shall be determined according to the number of points granted
each year.
In principle, in June of each year during the trust period, “fixed points” according to their positions and“performance base points” changing according to performance established for each position shall be
granted to Directors who are not Audit & Supervisory Committee Members, etc.
For “performance base points,” in principle, in June immediately after the end of the Targeted Period,“performance-linked points” are calculated by multiplying the number of “base performance points” by
the performance-linked coefficient according to the degree of achievement of performance targets in theMedium Term Management Plan during the said Targeted Period. The performance-linked coefficient
shall be changed within 0% to 200%, after having been decided according to the achievement of thetargets (operating cash flow, ROIC and TSR, etc.) during the Targeted Period.
At the retirement of each Director who is not an Audit & Supervisory Committee member, etc., the Grant,- 26 -

etc., of the Company’s Shares, etc., shall be executed according to the accumulated number of “fixed
points” and “performance-linked points” (“performance base points” if before calculating
performance-linked points).
One point shall equal one Company share. In the event that Company’s shares increase or decrease due toa share split or a consolidation of share and an adjustment of points is determined to be fair, the Company
shall adjust the number of Company’s shares per point according to the ratio of the share split or the
consolidation of share.
The upper limit of points to be granted to Directors who are not Audit & Supervisory Committee
Members, etc., for each fiscal year shall be 160,000 points.
(4) The Method and Timing of Grant, etc., of Company’s Shares, etc., to Directors who are not Audit &Supervisory Committee Members, etc.
Directors who are not Audit & Supervisory Committee Members, etc., who meet beneficiary criteria shallbe eligible for the Grant, etc., of the number of Company’s Shares, etc., calculated based on (3) above
based on specified procedures to determine the beneficiary after retirement, in principle. At this time,
Directors who are not Audit & Supervisory Committee Members, etc., shall be eligible for the Grant, etc.,
of Company’s shares equivalent to 70% of Accumulated Points (fractional shares are rounded down), andremaining points shall be realized in the Trust to pay Directors who are not Audit & Supervisory
Committee Members, etc. in the form of cash equivalent to realization value in order to secure funds fortax payment.
If a Director who is not an Audit & Supervisory Committee Member, etc., dies during their service, allCompany shares corresponding to Accumulated Points granted as of that date shall be realized in the
Trust and paid to the heir of the said Director who is not an Audit & Supervisory Committee Member,etc., in the form of cash equivalent to realization value.
(5) Voting rights of Company’s shares held in the Trust
The Company’s shares held in the Trust shall not include the right to exercise voting rights during thetrust period, in order to ensure the neutrality of the management.
(6) Treatment of dividend of retained earnings of the Company’s shares held in the Trust
Dividend of retained earnings of Company’s shares held in the Trust shall be received by the Trust to beappropriated for its trust fee and expenses. If there is any dividend remaining at the close of the Trust
after using dividends for trust fee and expenses, such dividend shall be paid to Directors, etc. who meetgiven beneficiary criteria and become beneficiaries of the Trust based on the trust agreement at the closeof the Trust.
(7) Other details of the Plan
Other details of the Plan shall be determined by the Board of Directors each time the Trust is set up, atrust agreement is changed, and an additional contribution is made to the Trust.

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